SBA redefines size standards for construction, utilities firms

THE U.S. SMALL BUSINESS Administration has redefined the maximum size a firm in the construction and utilities sectors can be to quality as a small business. Under the revised standards, nearly 500 additional construction firms will become eligible for SBA’s loan and federal-procurement programs, as well as nearly 400 additional utilities firms.

PROVIDENCE – The U.S. Small Business Administration has revised its size standards for the construction and utilities sectors, redefining the maximum size a firm can be and still be considered a small business.

In the construction sector, the SBA increased the size standards from $7 million to $25 million in annual revenue for firms in the land subdivision industry, and from $20 million to $25.5 million for businesses engaged in dredging and surface cleanup activities.

Nearly 500 additional firms will qualify as small businesses under the new construction size standards and become eligible for SBA’s loan and federal-procurement programs.

In the utilities sector, the SBA increased the size standards from $7 million to $25 million in annual revenue for water supply and irrigation systems firms, from $7 million to $19 million for sewage treatment facilities, and from $12.5 million to $14 million for steam and air-conditioning supply firms.

In addition, the SBA changed the determinant for business size from annual megawatt hours to number of employees in 10 electric power generation, transmission, and distribution industries. Following the change, the maximum number of employees to qualify as a small business is 500 for hydroelectric power generation firms; 750 for fossil fuel and nuclear electric power generation firms; 250 for solar, wind, geothermal, biomass and other electric power generation firms; and 500 for electric bulk power transmission and control firms.

The utilities sector amendments also removed a footnote that labeled a firm was a small business if the firm or its affiliates primarily engaged in the generation, transmission or distribution of electric energy for sale and its total electric output for the preceding fiscal year did not exceed 4 million megawatt hours.

Nearly 400 additional firms will qualify as small businesses under the new utilities size standards.

The revised standards reflect changes in marketplace conditions and public comments that SBA received to its earlier proposed rules, the federal agency said in a release on Monday. In addition to allowing more businesses to obtain small-business status, the new size standards give federal agencies a larger pool of small businesses from which to choose for their procurement programs, the SBA said.

Comments

Not once in the 60+ years of the "Small" Business Administration's history have they made a ruling that reduced the definition of "small". The SBA, like everyone else in Washington is enamored with and beholden to large corporations. There are 28 million businesses in America with 1-19 employees (98%) and only a couple hundred thousand with 100-500 employees (less than 2%). Yet almost all of the SBA's activity is focused on that tiny segment of very large businesses.

This story is the same one we've been seeing for decades; the SBA working with large corporations to figure out how to get them qualified as "small" so they can get special interest treatment and huge low-interest loans, all of which serves to crush the true small businesses who have access to almost nothing in the SBA.

In the last five years loans under $250,000 (the loans true small businesses need) have decreased every year. Loans under $150,000 have gone from 24% of the SBA's budget to 7% this year. And in 2013 the SBA backed fewer loans under $100,000 than at any time in their history.

It would be a refreshing approach for a journalist to stop blowing the SBA's horn for cow-towing to giant corporations and instead admonish them for having deserted true small businesses with 1-19 employees.

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